Iowa farmland values set another record

Iowa land values jumped nearly 16-percent in the latest Iowa State University survey — breaking the record high set last year. The survey says an average acre of farmland was two-thousand-629 dollars — a 354 dollar increase over last year. I-S-U Extension farm economist Mike Duffy conducted the survey He says a couple of things to note, this is the first time all 99 counties and topped one-thousand dollars-an-acre. Scott County in eastern Iowa became the first to go over the four-thousand dollar-an-acre mark with an average value of 41-hundred and 67 dollars. That’s the most expensive farmland in the state, while the lowest was in Decatur County in south central Iowa at 11-hundred and four dollars-an-acre. Duffy says the poorest quality land saw the biggest increase in value, though not by much. He says if you look across all of the districts, the east central with the best quality ground was up 12-and-a-half percent, and southwest Iowa was up 17-point-seven percent. Duffy says the ability to borrow cheap dollars helped push up the price of land. He says low interest rates were the number one reason given for the increase, but he says there’s also been a lot of interest in low quality land for hunting camps. Land values shot up to record levels in the late 1970’s before crashing in the early 1980’s. Duffy says he’s often asked if we’re heading on the same path, and he says there are a couple of factors that could impact future prices.He says one factor is how the national debt is handled. He says historically if we go an inflationary route, then land values will continue to go up. He says if interest rates go up, that’s negative on land values. He says another major factor is government programs and what happens to them. Duffy says government programs impact the price of corn and beans and that results in an impact on land values. Duffy says there is a difference between this increase in land values and the one that ended in a a downturn. He says we have less debt held against the land now than we did in the early eighties. Duffy says when values crashed in the 80’s, many people had much more debt on the land than what the land was worth. Duffy says the values ended up stronger than he’d predicted. He says he thought they’d be up about 11 percent.